Mr. ZJ owns a sole proprietorship. The business assets have a $246,000 aggregate adjusted basis. According to an independent appraisal, the business is worth $400,000. Mr. ZJ transfers his business to ZJL Corporation in exchange for 1,000 shares of ZJL stock. Assume that Mrs. L, who is Mr. ZJs business colleague, transfers $200,000 cash to ZJL Corporation in exchange for 500 shares of ZJL stock. Mr. ZJ and Mrs. Ls transfers occur on the same day, and after the exchange ZJL has 1,500 shares of outstanding stock (1,000 owned by Mr. ZJ and 500 owned by Mrs. L).

Compute Mr. ZJs recognized gain on the exchange of assets for stock.

Compute Mr. ZJ and Mrs. Ls tax basis in their ZJL stock.

Compute ZJLs tax basis in the assets transferred from Mr. ZJ.